How T-Mobile Made Hundreds Of Millions Charging Customers For "Bogus" Services

In yet another case of corporate malfeasance (which we are sure will see heavy jail sentences and sever punishments), the Federal Trade Commission is charging T-Mobile with making hundreds of millions of dollars by placing charges on mobile phone bills for purported "premium" SMS subscriptions that, in many cases, were bogus charges that were never authorized by its customers. Content such as flirting tips, horoscope information or celebrity gossip was charged to customers unknowingly and even when customers figured it out, T-Mobile failed to provide consumers with full refunds. Is it any wonder Telcos are doing so well?

What to look for in your bill to see if you were duped by your caring telco:

Defendant has not obtained authorization from consumers before charging them for Third-Party Subscriptions. Instead, the third-party merchants or billing intermediaries purportedly have obtained authorization. In many cases, however, these third parties have failed to obtain authorization from consumers.

Defendants’ phone bills include charges for its own services and third-party services. For consumers who receive their bills online, Defendant has provided an online summary:

In this summary, third-party charges, including for Third-Party Subscriptions, are included in the total for “Use Charges.” If the consumer clicked to expand the field for “Use Charges,” the consumer saw the following screen:

The category “Use charges” has included such charges as text messaging, as well as “Premium Services.” This screen, however, provides no explanation that “Premium Services” includes third-party charges for recurring Third-Party Subscriptions, nor does this section provide any additional information about the charges

A breakout of the actual third-party charges has typically appeared in the middle or towards the end of the bill, which in some instances may exceed 50 pages in length, under the heading “Premium Services.”

The information listed in this subsection has appeared in an abbreviated form (“8888906150BrnStorm23918”) that has not provided detailed information to the consumer about the nature of the charge. It has not explained that the charge was for a recurring Third-Party Subscription that the consumer purportedly authorized.

Some consumers do not even receive mobile phone bills. Consumers with pre-paid accounts do not receive monthly bills from Defendant; instead, these consumers pay a certain amount of money upfront for a specific number of minutes. When an unauthorized charge for $9.99 has been charged to these consumers’ accounts, Defendant has deducted $9.99 worth of minutes from their available balance. Defendant typically has provided no notice to the consumer of the charge.

T-Mobile Was Aware For Years that Charges Were Not Authorized by its Customers

In a complaint filed today, the Federal Trade Commission is charging mobile phone service provider T-Mobile USA, Inc., with making hundreds of millions of dollars by placing charges on mobile phone bills for purported "premium" SMS subscriptions that, in many cases, were bogus charges that were never authorized by its customers. The FTC alleges that T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month. According to the FTC's complaint, T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent.

"It's wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent," said FTC Chairwoman Edith Ramirez. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."

In a process known as "third-party billing," a phone company places charges on a consumer's bill for services offered by another company, often receiving a substantial percentage of the amount charged. When the charges are placed on the bill without the consumer's authorization, it is known as "cramming."

The FTC's complaint alleges that in some cases, T-Mobile was charging consumers for services that had refund rates of up to 40 percent in a single month. The FTC has alleged that because such a large number of people were seeking refunds, it was an obvious sign to T-Mobile that the charges were never authorized by its customers. As the complaint notes, the refund rate likely significantly understates the percentage of consumers who were crammed. The complaint also states that internal company documents show that T-Mobile had received a high number of consumer complaints at least as early as 2012.

The FTC has made significant efforts to end mobile cramming. In the last year, in addition to holding a public workshop on mobile cramming, the Commission has filed several lawsuits against alleged mobile cramming operations Jesta Digital, Wise Media, and Tatto Inc.According to today's complaint, T-Mobile billed its customers for the services of these FTC defendants as well as an operation sued by the Texas Attorney General.

The complaint against T-Mobile alleges that the company's billing practices made it difficult for consumers to detect that they were being charged, much less by whom. When consumers viewed a summary of their T-Mobile bill online, according to the complaint, it did not show consumers that they were being charged by a third party, or that the charge was part of a recurring subscription. The heading under which the charges would be listed, "Premium Services," could only be seen after clicking on a separate heading called "Use Charges." Even after clicking, though, consumers still could not see the individual charges.

The complaint also alleges that T-Mobile's full phone bills, which can be longer than 50 pages, made it nearly impossible for consumers to find and understand third-party subscription charges. After looking past a "Summary" section as well as an "Account Service Detail" section, both of which described "Usage Charges" but did not itemize those charges, a consumer might then reach the section labeled "Premium Services," where the crammed items would be listed.

According to the complaint, the information would be listed there in an abbreviated form, such as "8888906150BrnStorm23918," that did not explain that the charge was for a recurring third-party subscription supposedly authorized by the consumer. In addition, the complaint notes that consumers who use pre-paid calling plans do not receive monthly bills, and as a result the subscription fee was debited from their pre-paid account without their knowledge.

When consumers were able to determine they were being charged for services they hadn't ordered, the complaint alleges that T-Mobile in many cases failed to provide consumers with full refunds. Indeed, the FTC charged that T-Mobile refused refunds to some customers, offering only partial refunds of two months' worth of the charges to others, and in other cases instructed consumers to seek refunds directly from the scammers – without providing accurate contact information to do so.

The complaint also notes that in some cases, T-Mobile claimed that consumers had authorized the charges despite having no proof of consumers doing so.

The FTC's complaint seeks a court order to permanently prevent T-Mobile from engaging in mobile cramming and to obtain refunds for consumers and disgorgement of T-Mobile's ill-gotten gains.

I don't care who your cxr is, what you need to do is put a 3rd party block on billing. If you don't use it, block texting too or just use AAPL to AAPL for free. My personal experience was after receiving/not replying to a text from Mobi-Bro, that started a $9.99 per mo billing cycle. Not bad pickins for auto bots texting thousands blocks of numbers. At one time texting was their biggest money maker. Kill the beast.

Not with my cxr it doesn't. Same goes for 3rd party billing on a landline & prison phone calls. What cxr? Show me & look it up in the tariff's, I believe that would be illegal not to mention start a mass exodus.

If they did start that, I'd go right back to a fruit jar & a string cuz it's just one more thing I can do without.

Having a few friends that worked as sales people for T mobile and other cell phone cos (there is really high turnover for the independent stores) I would not be surprised if the sales people were gaming the system somehow by authorizing this. The incentives offered by the mobile cos. to the sales people are ridiculous and encourage graft. Not that I doubt Tmobile would do this, however.

The other day, The Onion had headline: "Brazil Government ensures that it will take World Cup profits to reinvest in country's infrastructure". And *that* was the joke. And it was pretty fucking funny because we ALL know where that money is going.

Thing is, The Onion had fallen off until recently; but now with these many headlines, all they have to do is print the truth and/or what is supposed to happen = comedy gold.

Over the years, I've never been screwed by Trader Joe's, Walmart, Amazon dot com, or ebay dot com.

Oh... and zenni optical, where I save a ton of money on eye glasses. A fine business. (No, I don't work for zenni. And I buy a lot of eye glasses. Three separate Rxs. Reading, computer, and driving. Extra emergency pairs for each car.)

I have 32 euro's on my bill from such sms services that send me texts that I did not subscribe to, can't unsubscribe and even don't know what it is about
And guess what, I complained last week that I will not pay for it and they shut me down directly.
But off course, my subscription fees keep on going.
There's not that much I can do than to pay actually.
I noticed those bills on accident but when you look for example to your banking cost, I have about 107 euro's in service fees... What service?
And when you ask the detail, it's 10 cents there, 20 cents here, 15 cents there. How do you actually know what to do?
And I have 4 checking accounts so... All I can think of is that i never saw this!

“As long as it is admitted that the law may be diverted from its true purpose--that it may violate property instead of protecting it--then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder.” ? Frédéric Bastiat, The Law

The law is either an instrument of justice or an instrument of plunder. Never both.

How many old people are still paying for the AT&T "Inside Wiring" plan? How much free money is THAT per month?

Grandma knows that as soon as she cancels that, the phone wiring will short out and burn down her house (the nice lady on the phone said not to cancel it or "I'd have to pay. What did the nice lady mean by 'I'd have to pay...' ").

There will be a class action lawsuit. All T-Mobile users will be included, unless they opt-out. They will win handily. The lawyers will negotiate a settlement. Each of the plaintiffs' lawyers will earn $15 million a piece. Each T-Mobile user (if they opt-in to the award), will receive a coupon for one month's worth of free SMS texts from the reality show star of their choice.

In my case I received a $1.98 credit on my VISA card for an undesignated "settlement" pay out by a former, socialist cocksucking MNC employer that began openly and aggressively discriminating against white people in 1995, in order to reduce their "exposure" projected by the "census". Their profit margin has been in the toilet ever since...

Oh yeah... Everybody loves those indian "investment brokers" who call you in the middle of the night...

When I hear a indian dialect, I just tell them to fuck off and press off. 20 seconds later they call back and than I tell them to rot in hell and press off and 20 seconds later they call back and I tell them I fucking hate them and press off and 20 seconds later I press the block number.

Today, I also got a weird popup on my phone....

You have:
Walked for 12 hours last month
On bycycle 4 hours
Want to know more?

THAT SHIT IS JUST SCARRY SHIT RIGHT THERE!!!

And that came from google... My wife finds that "amazing".... I just can't explain her that that is just plain spying

See that's why I have AT&T. They have a long established history of trust with their customers and they would never do anything to tarnish their reputation. Hey.... what was that? I thought I heard somebody breathing and listening to my phone call.... ahh it was nothing I'm sure.

Welcome USSA to 3rd world business practices too! Bharti (Airtel) has been doing this since like forever in all circles of India. They bleed prepaid customers of even the last 5 rupees (1 USD=60 INR as of 30-Jun-2014). So like, poor folk who've been saving talktime for real emergencies suddenly find a new Bollywood Masala movie tidbit just deducted 5 bucks from their balance and they can't make any more calls.

People use their phones for so many things, I'm sure a lot of people figure they DID use the service at some time, for something.

Then they look at that 9 dollar charge, and get a mental image of themselves, on the phone for 1 1/2 hours, pressing 1 for English, then 'pressing' their way through the entire menu, then waiting on hold for 45 minutes for the next available representative, and convince themselves they probably DID order this at some point, and it's only 9 bucks, so...

Script: Some lawyers will get richer, a “fine,” that will make the government just a little less broke, will be paid, the pols and crats involved will get career boosts, one or two goy will go to jail and the customers affected will get next to nothing.

If you aren't selling stinger missles or plotting any assassinations , you can get a Google Talk number for free on a Gmail account. It works for local and long distance in US and Canada. If you go overseas it will also work if you have a us number. I've used it to call the states from Australia free.

T-Mobile are obviously emulating the British Telecom (BT) practice of charging for bogus calls. According to two recent BT phone bills, I made calls from my home landline when I was 6,000 miles away and the phone cable was pulled out of the wall socket before I went away. Although BT eventually credited the bogus charges, they have never apologised.

I'll need to look at my T-Mobile bill from last month, unless she already schreded the document. I am a grandfathered tmobile user. My primary line line includes three piggyback lines. One flat fee for unlimited, and 5 GB to download my financial porn.

I recall seeing some random/unsubscribed-to texts hitting my phone in 2012 (used AT&T before we bailed to Thailand). I never had time to scrutinize the bill to see if I was being charged (who the f*ck has time to go through your phone bills? I was too busy working to pay taxes, phone and other bills!!).

Here in Thailand the system is somewhat different. Our daughter has an "all-in, unlimited" plan for 690 Thai Baht/month (about $21 US). This is a great deal compared to USA, where we paid ~$100 for the "same."

The wife and I use prepaid minutes only here. If we need internet, it is easy to find free WiFi. This reduces our costs to ~$7-10/month.